Japan stock market week to Feb 6, 2006

Tokyo saw continued strength in the week ended February 6, following mixed moves. The Nikkei 225 advanced 1.2%, to close above the 16,700 mark, a new high since late August 2000, while the Topix index edged up 0.5%. The market sustained its firmness, overcoming the pressure of profit-taking after the recent rally, a dearth of fresh trading ideas and weakness of New York markets. Additionally, investors welcomed positive economic data. The December 2005 diffusion index of coincident economic indicators showing Japan's current economic status was above the boom-or bust cutoff point of 50%, and the reading above the 50% was recorded for five months in a row. The unemployment rate in December dropped 0.2 points from November to 4.4%.

The pharmaceutical index inched down 0.3%, underperforming the market. Tanabe advanced 5.6%, after it reported significantly-better-than-projected results for the first three quarters ended December 2005, due to growth of Remicade (infliximab), for treatment of Crohn's disease and rheumatoid arthritis in-licensed from Centocor (part of Johnson & Johnson), and some major prescription drugs, as well as cost controls. Turnover increased 1.3% year-on-year to 138.2 billion yen ($1.16 billion). Operating income increased 6.3% to 28.5 billion yen and exceeded the full-year target of 27.5 billion yen. Remicade jumped 73.1% to 9.6 billion yen. Sales of Ceredist (taltirelin HCl), a treatment for spinocerebellar degeneration, rose 6.9% to 11.1 billion yen.

Eisai ended up 2.2%, reacting to its stronger-than-projected results for the first three quarters, on brisk sales of Aricept (donepezil) for Alzheimer's disease treatment and Aciphex (rabeprazole, Pariet in Japan), its proton pump inhibitor antiulcer agent. Based on the results, the company has raised its full-year forecast. Global sales of Aricept expanded 16.9% to 142.6 billion yen and Aciphex grew 13.1% to 114.0 billion yen.